The insurance industry was once considered slow to innovate, but now is leading the way in meeting changing consumer preferences. That’s evident in the way insurers are using their wealth of data on policyholders to tailor their messaging and product offerings.
Personalization is a growing customer desire across all industries. And it has the potential to transform the entire way the industry operates. Three quarters of insurance customers say they would switch providers for more personalized services and tailored products, and 38% would pay more for those offerings, according to Accenture. Furthermore, 80% of insurance customers are looking for more personalized offers and communications.
We are going to discuss the two main ways that digital personalization is occurring in insurance today: Product Design and Customized Marketing Communications.
A primary outgrowth of the personalization trend involves how the actual insurance product is developed and pitched to customers. If the core of the product or service is already centered on personalization, then it will likely be able to resonate with customers before marketing even enters the picture.
For example, insurers developed usage-based insurance (UBI) as a method to more accurately price premiums and determine drivers’ risk profiles using telematics. The very nature of this service involves personalization. The service gives drivers more control over their premium prices — the safer they are, the less they will typically have to pay for their premium. UBI has evolved risk pricing and made the process more accurate and the product more customized. While some drivers may be hesitant to exchange their information with insurers, many are happy to do so because of that control. Consumers like that their auto insurance policy feels specific to them.
Additionally, insurers’ mobile apps are a way to offer consumers convenient access to policy information and allow them to submit claims or receive advice directly from their agent or provider. Safe-driving apps are another example, all improving customization through data collection and the exchange of information. These inherently personal items all improve the customer experience by aligning with consumer needs.
Greater data analysis of consumer behavior drives better informed, personalized marketing driving overall customer satisfaction.
The Lesson: If personalization isn’t part of your product’s core definition, consider modifying existing features or adding new services that center around it. How can you change your product so that it inherently involves more customization? Remember, many consumers want personalized products that offer a value.
Good insurers market their products and services by customizing materials based on consumer information and by using data to derive insights.
They test word choice and keep the consumer’s location, past contact and current context in mind to continuously improve the digital experience. The language used to describe services or products remains personal and engaging.
Additionally, marketing can also include helpful, personalized content. For example, an insurer’s communications can include information based on life stage, geography or things owned, delivering info that is of value to the user. This type of customization can also occur in other touchpoints. Insurers may also contextualize images, graphics and words to fit the current situation — if a user just filed a claim, there may be a specific newsletter insurance series to send that provides information about post-car accident matters such as the claims process or usual waiting time for types of car repairs. Use marketing as an opportunity to become more personable and engaging in an online context. Be deliberate and thoughtful with your words and continuously work to create higher performing marketing materials. Rely on data to make evidence-backed decisions and test variants before settling on an image, graphic or phrase. Aim to have continuous small fixes that improve your engagement rate and consider offering relevant content that is helpful to your customers.
With data-backed choices, you can turn your personalized marketing into a personalized experience.
These are just a couple examples of how more customization in the insurance business is driving greater success. Remember: A great customer experience can be delivered when thoughtful product design and effective communications come together successfully.
With some reporting and research from Seth Birnbaum.